The truth is hard and sometimes bitter, especially when it destroys everything you’ve believed in, which is why Europe’s grand wind and solar fail has upset the climate cultists who keep screaming that the world is on the brink of imminent self-immolation.
The panacea, they say, is more of the very thing that’s destroyed reliable and affordable power supplies around the globe, not least in Europe. Logic and reason don’t get a look in.
The trouble with having power on demand and at affordable prices, is that the proletariat has become used to it. Hard to wean people off something that’s been at the heart of ordered and civil society for the best part of a century.
But that is, indeed, what the Malthusian misanthropes who continue to rail about the weather, windmills and solar panels are out to do.
The Australian’s Graham Lloyd provides a little reality check.
Low-emissions transition splutters as energy crisis bites
29 October 2022
The energy crisis has become the Albanese government’s Covid emergency. Global events have exposed deep problems at home. As with the pandemic, premiers are calling the shots but the federal government is left carrying the can.
Electricity prices are forecast to rise a further 30 per cent next year, terminating a key federal election pledge by Labor to lower costs for households. Industry is heavily exposed with high gas prices here to stay and local manufacturers unable to compete.
The solution for Labor is intervention. Victorian Premier Daniel Andrews has announced plans to nationalise future energy development and speed the closure of coal. Federal Labor is under pressure to cap prices for gas and/or divert supplies away from export to the domestic market.
There has been an ominous warning from Santos chief executive Kevin Gallagher that Australia risks going down the same road as Argentina. He says market intervention and price controls kill investment and curb supply. This lifts prices so that manufacturing has to be propped up with government subsidies that in turn drive government debt to unsustainable levels. Poor households suffer most.
Australia risks learning the lesson openly acknowledged by leaders around the world that the public will not tolerate a low-emissions transition that means a choice between heating and eating. This is the situation in Britain, where a refusal to frack for gas has left a nation exposed to the depredations of a Russian dictator.
Rather than step back, the Albanese government appears determined to double down. The budget included $20bn in concessional loans to crisscross the nation with electric wires. This money ultimately must be recovered from electricity users. There’s another $42.6m to restore the Climate Change Authority and introduce an annual climate change statement to parliament. An army of bureaucrats will be sent into the world to convince other nations that Australia is back in the game on climate action. There is a lot of diplomacy behind the Albanese government’s bid to host a meeting of the UN Framework Convention on Climate Change in 2024.
But dark clouds hang over the next climate change meeting due to start at the Egyptian resort town of Sharm El-Sheikh on November 6. COP27 marks the 30th anniversary of the UNFCCC but the scorecard is bleak and tensions are high between the developed and developing world over who is responsible for climate change and who should pay to fix it.
Senegalese President Macky Sall called an Africa climate adaptation summit in Rotterdam to bring together countries that needed help adapting to a warming planet with industrialised nations whose emissions are to blame. Only the African leaders showed up. International non-government organisation Oxfam has likened the debt-led climate assistance being pushed on to developing nations as akin to Beijing’s much criticised Belt and Road Initiative.
A UN update on progress released on Thursday said that in 2019 the Intergovernmental Panel on Climate Change indicated that to curb global warming, CO2 emissions needed to be cut by 43 per cent by 2030 compared with 2010 levels, but current plans show a 10.6 per cent increase instead.
Last year, during the UN Climate Change Conference COP26 in Glasgow, Scotland, all countries agreed to revisit and strengthen their climate plans. However, only 24 out of 193 nations submitted updated plans. A stocktake of how successful the energy transition has been globally so far also makes for depressing reading.
Goldman Sachs global head of commodities research Jeff Currie says last year fossil fuels represented 81 per cent of overall energy consumption. Ten years ago they were 82 per cent. “So $US3.8 trillion of investment in renewables moved fossil fuel consumption from 82 per cent to 81 per cent,” Currie says. “But you know, given the recent events and what’s happened with the loss of gas and replacing it with coal, that number is likely above 82 … The net of it is clearly we haven’t made any progress.”
Modelling for the International Energy Agency’s World Energy Outlook released on Thursday indicates that has global demand for every fossil fuel exhibiting a peak or plateau with total demand for fossil fuels declining steadily from the mid-2020s to 2050.
“Global fossil fuel use has grown alongside GDP since the start of the industrial revolution in the 18th century: putting this rise into reverse will be a pivotal moment in energy history,” the IEA says. The share of fossil fuels in the model will fall from about 80 per cent to just above 60 per cent by 2050. Global CO2 emissions fall back slowly from a high of 37 billion tonnes a year to 32 billion tonnes by 2050. This would be associated with a rise of about 2.5C in global average temperatures by 2100.
But it is hard to reconcile the IEA modelling with data presented by German environment and human rights group Urgewald that monitors developments in coal. Urgewald’s latest report, prepared for COP27 and using the world’s most comprehensive public database on the coal industry, finds that although the COP26 summit ended with an agreement to “accelerate efforts towards the phasedown of unabated coal”, 46 per cent of the companies monitored are still heading in the opposite direction.
“Out of the 1064 companies in our database, 490 are developing new coal power plants, new coalmines or new coal transport infrastructure,” the Urgewald report says. There are 476 gigawatts of new coal-fired power capacity still in the pipeline worldwide. If realised, these projects would increase the world’s current coal power capacity by 23 per cent.
Companies on the Global Coal Exit List aim to develop new thermal coal mining projects with a volume of more than 2500 million tons per annum, equal to more than 37 per cent of the world’s current thermal coal production. The bulk of these projects are in China (967 mtpa), India (811 mtpa), Australia (287 mtpa), Russia (144 mtpa) and South Africa (91 mtpa).
And as energy prices rise, investment firms that have been talking a big game on quitting fossil fuels are starting to waver.
According to Bloomberg, COP27 is a non-event for the corporate elite. BlackRock chief executive Larry Fink won’t be at the summit. Nor will Citigroup chief Jane Fraser or Bill Winters of Standard Chartered. All three made a point of attending COP26.
No doubt Australia will be well represented in Egypt, both by politicians keen to show the world that Australia means climate business and by local business leaders keen to send the same message. But there are lessons for the Albanese government in how to better handle the energy transition and the rush to close down fossil fuels.
Rocked by Russia’s attack on Ukraine, the IEA acknowledges that shortfalls in fossil fuel production from Russia will need to be replaced by production elsewhere – even in a world working towards net-zero emissions by 2050.
“A new energy security paradigm is needed to maintain reliability and affordability while reducing emissions,” the IEA says.
“During energy transitions, both systems are required to function well in order to deliver the energy services needed by consumers, even as their respective contributions change over time. Even as transitions reduce fossil fuel use, there are parts of the fossil fuel system that remain critical to energy security, such as gas-fired power for peak electricity needs.”
The agency says unplanned or premature retirement of this infrastructure can have negative consequences for energy security.
There is even a lesson in central planning from Xi Jinping. Kicking off the Communist Party congress, China’s reaffirmed paramount leader said his country would “work actively and prudently toward the goals of reaching peak carbon emissions and carbon neutrality”. He said: “Based on China’s energy and resource endowments, we will advance initiatives to reach peak carbon emissions in a well-planned and phased way, in line with the principle of getting the new before discarding the old.”
via STOP THESE THINGS
November 24, 2022 at 12:35AM